Market Overview

InterMune Soars 19 Percent After Q3 Earnings Results

Biotechnology firm InterMune (NASDAQ: ITMN) has been among the largest gainers on the Nasdaq on Thursday. At last check, the stock was trading up more than 19 percent to $9.73. It has been a rough year for the company with the stock down nearly 58 percent over the last 52-weeks and 23 percent in 2012.

Like many biotech companies, ITMN has an interesting stock chart. The shares soared above $47.00 in April 2010 before quickly crashing back down. In April 2011, ITMN surged above $51.00 for a short period of time before another subsequent crash.

The company's primary product is a drug called Pirfenidone, which is used in the treatment of idiopathic pulmonary fibrosis (IPF), a fatal and progressive lung disease. The treatment is the only medicine approved for IPG in the world and InterMune currently markets the product under the Esbriet in the European Union. The company is currently conducting a Phase III trial in an effort to gain FDA approval in the United States for Pirfenidone.

Since 2007, InterMune's sales have been steadily falling despite intermittent investor optimism about the company's pipeline. Although the Brisbane, California-based biotech firm reported another loss for the third-quarter, the results came in above analysts' expectations.

InterMune said that it lost $45.4 million or $0.70 per share, compared to a loss of $38.2 million or $0.63 per share, in the year ago period. This was considerably better than analysts' consensus earnings per share expectations calling for a loss of $0.84.

Sales in the quarter were a mere $7.5 million versus just $0.1 million in last year's corresponding period. This also came in ahead of Wall Street revenue estimates of $6.16 million. The company said that it expects Esbriet sales for the full-year to be between $20 and $25 million and total revenue to be at the high end of its guidance range. Currently, analysts estimate that InterMune will report full-year 2012 revenue of $27.19 million.

The rally in the stock on Thursday has sent the stock above a descending trend-line that goes back to March, but there is still considerable overhead resistance from a technical perspective. Shares are now trading around 15 percent above their 20-day moving average and 13 percent above the 50-day. Traders should anticipate, however, more resistance in the name around the $10.00 level and at the 200-day moving average which is around 13 percent higher from current levels.

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